2024-2025 Canada’s Budget

The Federal government's budget on April 16, 2024, introduces changes that may affect your individual and family finances.

Reflections since the last budget* **

(PERIOD BETWEEN MARCH 28, 2023 - APRIL 16, 2024)

Canadian Dollar vs. the U.S. Dollar

72.35¢

April 16, 2024

MARCH 28, 2023 BUDGET

73.39¢

S&P/TSX Composite

21,642.87

April 16, 2024

MARCH 28, 2023 BUDGET

19,657.53

Oil Price per Barrel in $USD

$85.28

April 16, 2024

MARCH 28, 2023 BUDGET

$73.37

Unemployment Rate

6.10%

March 2024

MARCH 28, 2023 BUDGET

5.00%

Budget Highlights

Higher Capital Gains Inclusion Rate

"Inclusion rate" will increase from 50% to 66.7% on capital gains above $250,000 per year for individuals, and on all capital gains realized by corporations and trusts.

Lifetime Capital Gains Exemption (LCGE)

Increases to $1.25 million (from $1,016,836), with indexation of the LCGE resuming in 2026. Applies to dispositions that occur on or after June 25, 2024.

Canadian Entrepreneurs' Incentive

Allows individuals to use a 33.3% capital gains inclusion rate for the disposition of qualifying shares, subject to a lifetime limit of up to $2 million in capital gains – limit will be phased in by increments of $200,000 annually.

Alternative Minimum Tax (AMT)

Allows individual to claim 80% of their Charitable Donations Tax Credit when calculating AMT.

Home Buyers’ Plan

RRSP withdrawal limit increased to $60,000 (from $35,000) without tax for 2024 and subsequent calendar years, for eligible first home purchases (withdrawals after April 16, 2024). Start of the 15-year repayment period temporarily deferred to the fifth year following year of first withdrawal.

Canada Child Benefit (CCB)

CCB extended for six months after a child’s death, starting in January 2025.

Canada Carbon Rebate for Small Businesses

A new Canada Carbon Rebate for Small Businesses in the form of an automatic refundable tax credit for eligible businesses. The tax credit would be available to Canadian-controlled private corporations with under 500 employees.

Disability Supports Deduction

Annual maximum benefit of $2,400 with expanded list of recognized expenses under the Disability Supports Deduction, effective 2024 and subsequent taxation years.

Canada Learning Bond (CLB)

The government will open a CLB if a child does not have an RESP by age four. The CLB pays $500 in the first year the child is eligible, plus $100 for each additional year of eligibility, up to age 15, for a maximum of $2,000.

Student Grants and Loans

The Government will continue extending the increase in full-time Canada Student Grants from $3,000 to $4,200 and interest-free Canada Student Loans from $210 to $300 per week.

CPP Benefits

The expansion of benefits include:

• Doubling the death benefit for some contributors.
• Introducing a partial child benefit for part-time students.
• Extending the eligibility for the disabled contributors children’s benefit beyond a parent’s 65th birthday.
• Ending eligibility for survivor pensions if a couple is legally separated.

Your Advisor can help you understand how these changes may impact your finances.

SOURCES:

Budget 2024: https://budget.canada.ca/2024/home-accueil-en.html

Canadian/US Dollar: https://www.bankofcanada.ca/rates/exchange/currency-converter

S&P/TSX Composite https://ca.finance.yahoo.com/quote/%5EGSPTSE/history?p=%5EGSPTSE

Crude Oil Prices: https://ca.investing.com/commodities/crude-oil-historical-data

Unemployment Rate February 2024 (6.1.0%) : https://www150.statcan.gc.ca/n1/daily-quotidien/240405/dq240405a-eng.htm